Citation NR: 9602570
Decision Date: 02/01/96 Archive Date: 02/16/96
DOCKET NO. 93-24 985 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Providence,
Rhode Island
THE ISSUE
Entitlement to waiver of recovery of an overpayment of
improved death pension benefits, in the amount of $4,130.00.
ATTORNEY FOR THE BOARD
R. T. Jones, Counsel
INTRODUCTION
The veteran had active service from January 1944 to August
1946 and from September 1949 to August 1961. He died in June
1991. The appellant, who is the veteran's widow, has
appealed to the Board of Veterans' Appeals (Board) from the
April 1993 decision of the Committee on Waivers and
Compromises of the Department of Veterans Affairs (VA)
Regional Office (RO) in Providence, Rhode Island, which
denied her claim for a waiver of recovery of an overpayment
of death pension benefits.
That decision was predicated on a finding that although there
was no evidence of fraud, misrepresentation, or bad faith
(statutory bars to waiver), recovery of the overpayment would
not be against the standard of equity and good conscience.
CONTENTIONS OF APPELLANT ON APPEAL
The appellant that she is entitled to waiver of the
overpayment of death pension benefits. The appellant asserts
that inasmuch as her only income is from Social Security
disability benefits, she is unable to pay the amount of
overpayment, and recovery by VA would therefore result in
financial hardship.
DECISION OF THE BOARD
The Board, in accordance with 38 U.S.C.A. § 7104 (West 1991),
has reviewed and considered all of the evidence and material
of record in the appellant’s claims file. Based on its
review of the relevant evidence in this matter, and for the
following reasons and bases, it is the decision of the Board
that recovery of the overpayment of death pension benefits
would be against the standard of equity and good conscience.
FINDINGS OF FACT
1. The failure of the appellant to notify the RO of an award
of disability benefits by the Social Security Administration
(SSA) resulted in an overpayment of improved death pension in
the amount of $4,130; this failure did not constitute fraud,
misrepresentation, or bad faith on the appellant’s part.
2. The VA had no fault in the creation of the overpayment.
3. While there was fault on the appellant's part in causing
the overpayment, recovery of the overpayment would cause
undue financial hardship.
CONCLUSION OF LAW
Recovery of the overpayment in death pension benefits in the
amount of $4,130 would be against the principles of equity
and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 1991);
38 C.F.R. §§ 1.963, 1.965 (1994).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Factual Background
The appellant's September 1991 application for improved death
pension benefits states that she had no income or net worth
at that time. She was thereafter awarded improved death
pension based on no income. By letter of February 1992, with
attachment, she was notified that her rate of VA pension was
based on no income, that adjustments must be made whenever a
change in income occurs, that she must notify the VA
immediately if she or her family received any additional
income, that she was obligated to report any change in
income, and that a failure to promptly inform the VA of
income changes may result in an overpayment.
In October 1992 the appellant filed a VA Form 21-0518,
Improved Pension Eligibility Verification Report, showing she
was in receipt of $ 756 monthly SSA disability benefits. She
also reported unreimbursed medical expenses of $1,514.91.
Based on that information, the appellant was informed, in a
November 1992 letter, that the RO proposed to terminate her
benefits effective October 1, 1991. She was notified that an
overpayment was created.
Received in the RO in November 1992, was a copy of a December
1991 award letter from the SSA showing an award of $756 in
monthly disability benefits beginning in December 1991;
additional information from the SSA shows the first check to
the appellant in December 1991 was for $4374. Based on this
information, the appellant was informed, in a January 1993
letter, that the RO terminated her benefits effective January
1, 1992, not October 1, 1991, as proposed in the earlier
letter. She was notified that an overpayment was created.
In March 1993 the appellant requested waiver of the debt.
She also submitted a letter from her physician who reported
that she had been under his care since the death of her
husband in 1991 for numerous psychiatric symptoms including a
feeling of being overwhelmed by a myriad of matters which
were left in turmoil and impairment of concentration.
In April 1993, a Financial Status Report (FSR) was received
from the appellant in which she indicated that her monthly
income exceeded his monthly expenses by $3.52. Her listed
assets were $500 in furniture and a car worth $2,000; the
record reflects she has some equity in a residence. She
reported no liquid assets and her monthly installment
contracts (other than a small mortgage payment) are all for
medical expenses.
In April 1993 the Committee on Waivers and Compromises
(Committee) considered the appellant's waiver request and
initially found no evidence of fraud, misrepresentation or
bad faith on her part, but held that collection of the
indebtedness would not be against equity and good
consciousness.
In July 1993, the RO received a VA Form 21- 8416 (Request for
Information Concerning Medical, Legal, or Other Expenses) in
which the appellant provided a list of unreimbursed medical
expenses which she reportedly had paid in 1992, and
additional medical expenses which she had not yet paid due to
lack of funds.
Analysis
The Committee made a specific determination in April 1993
that there was no fraud, misrepresentation, or bad faith on
the appellant’s part with respect to the creation of the
overpayment at issue. The Board agrees; therefore, waiver is
not precluded pursuant to 38 U.S.C.A. § 5302(a) (West 1991).
However, to dispose of the matter on appeal, the Board must
determine whether recovery of the indebtedness would be
against equity and good conscience, thereby permitting waiver
under 38 U.S.C.A. § 5302(a) (West 1991) and 38 C.F.R.
§§ 1.963(a), 1.965(a) (1994).
The standard of "equity and good conscience" will be applied
when the facts and circumstances in a particular case
indicate a need for reasonableness and moderation in the
exercise of the Government's rights. The equity and good
conscience standard means arriving at a fair decision between
the obligor and the Government. In making this decision,
consideration is given to the fault of the debtor; balancing
of fault of the debtor against any fault of the VA; whether
collection would deprive the debtor of basic necessities;
whether recovery would nullify the objective for which
benefits were intended; whether failure to make restitution
would result in unfair gain to the debtor; and whether
reliance on the benefits would result in relinquishment of a
valuable right or incurrence of a legal obligation. 38
C.F.R. § 1.965(a).
As to the first element, fault of the debtor, the appellant
was at fault in the creation of the indebtedness.
Essentially, she did not report that she was awarded SSA
disability benefits in December 1991. The record shows that
she was made aware of the necessity of reporting any change
in her income; nevertheless, she failed to report the award
of SSA disability benefits. As a result of her failure to
report, an overpayment was created. However, the record also
shows that she was during this time undergoing psychiatric
treatment for symptoms including being overwhelmed by the
disarray of her life following the death of her husband. The
recent death of her husband and her particular circumstances
thereafter mitigate her fault in the creation of
indebtedness.
The second element deals with the fault on the part of the
VA, and as noted above, there have been no allegations that
the overpayment was created as a result of fault on the part
of the VA, and as such, the record does not suggest that
there was any such fault as the VA repeatedly informed the
appellant of her obligation to report changes in income.
In this case, the element of hardship is of particular
importance. The Board notes that the pertinent regulation
provides that consideration should be given as to whether
collection of the indebtedness would deprive the appellant of
the basic necessities. Currently, the appellant contends
that a waiver of the overpayment should be granted since a
repayment would cause undue hardship.
The Board has reviewed the appellant’s reports of her
finances and observes that, as of early 1993, her monthly
expenses were in rough equivalency to her monthly income, and
she later reported additional unreimbursed medical expenses.
Further, she reports no liquid assets and her monthly
installment contracts (other than a small mortgage payment)
are all for medical expenses. The Board finds that waiver
should be granted for the remainder of the debt based on the
appellant’s minimal income and assets.
Accordingly, in view of the hardship resulting from recovery
of the overpayment, recovery would be against equity and good
conscience and waiver of recovery is warranted. 38 U.S.C.A.
§ 5107(b) (West 1991).
ORDER
The appeal is granted.
EUGENE A. O’NEILL
Member, Board of Veterans' Appeals
The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___
(1994), permits a proceeding instituted before the Board to
be assigned to an individual member of the Board for a
determination. This proceeding has been assigned to an
individual member of the Board.
NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 7266 (West
1991), a decision of the Board of Veterans' Appeals granting
less than the complete benefit, or benefits, sought on appeal
is appealable to the United States Court of Veterans Appeals
within 120 days from the date of mailing of notice of the
decision, provided that a Notice of Disagreement concerning
an issue which was before the Board was filed with the agency
of original jurisdiction on or after November 18, 1988.
Veterans' Judicial Review Act, Pub. L. No. 100-687, § 402
(1988). The date which appears on the face of this decision
constitutes the date of mailing and the copy of this decision
which you have received is your notice of the action taken on
your appeal by the Board of Veterans' Appeals.
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